Friday, December 08, 2006

Yay us!

Well, not quite us exactly...

TORONTO - Canada holds almost 60 per cent of the investable oil reserves in the world today and by the end of the decade Canadian oil sands production will be the planet's single largest source of new supply, according to CIBC World Markets latest Monthly Indicators report.

"Canada's oil sands may be the final frontier for investors intent on profiting from depleting conventional crude reserves," says Jeff Rubin, Chief Strategist and Chief Economist at CIBC World Markets. "With the Middle East and even Russia increasingly off-limits, we estimate that the oil sands and Canada's other deposits represent 56 per cent of the world's investable reserves."

The report notes that despite soaring crude prices, conventional oil capacity dropped in 2005 for the first time in history and will continue to decline for the foreseeable future. It also notes that all of the projected three million barrel-a-day increase in world production between now and the end of the decade will come from non-conventional sources - with Canadian oil sands accounting for larger share of incremental production growth after 2009.

Three things here:

1) Any Canadian knows there's no such thing as "Canadian" oil, as this press release erroneously calls it - the vast majority of oil belongs to Alberta, and nothing enrages the Albertan political class more than the suggestion that Albertan oil might also be Canadian oil. Except possibly the suggestion that Quebec is only Quebec, and can't possibly also be Canada. Both these things seem to enrage western conservatives. One day, they will learn irony.

2) I was shocked to see a frank recognition of peak oil in a major bank's press release, but the bold section is exactly that.

3) I haven't read the full report yet (but I will!) but the implication is clear: global oil production is going down, even if Canada ramps up production. Remember - the most wildly inflated, super-duper optimistic projection shows Canada producing 4 million barrels a day by 2020.